We have previously produced lines of rats transgenic for HLA-B27 and human beta 2-microglobulin (h beta 2m) that develop a progressive inflammatory disease sharing many clinical and histologic features with the B27-associated human spondyloarthropathies, including gut and male genital inflammation, arthritis, and psoriasiform skin lesions. Other transgenic lines that express lower levels of B27 and h beta 2m remain healthy. To investigate the cellular basis for the multisystem inflammatory disease in these rats, we transferred lymphoid cell populations from disease-prone transgenic lines to irradiated disease-resistant transgenic and nontransgenic recipients. In recipients of cells from two different disease-prone lines, successful transfer required engraftment of bone marrow cells. Transfer of disease with fetal liver cells suggested that neither mature effector cells nor active disease in the donors was necessary for induction of disease in the recipients. Remission of the spontaneous disease in irradiated transgenic rats was induced by engraftment of nontransgenic bone marrow. These results suggest that the expression of HLA-B27 in bone marrow-derived cells alone is sufficient for the development of B27-associated disease, and that disease transfer requires engraftment of a bone marrow precursor cell for which mature cells in spleen or in lymph node cannot substitute.